In an unusually volatile month, nervous that investors redeemed about $ 34 billion in cash from the United States stock and bond mutual funds in August 2011 (open and closed-end mutual funds, with the exception of ETFs and funds underlying variable annuities). August marked the third straight month of net resource outflows of long-term funds, after net outflows of 16 billion dollars in July, according to Strategic Insight, a provider of business intelligence in the industry worldwide.
Fund shareholders are clearly shaken by the drama last month. August began with a prolonged political battle over the Federal Government's debt ceiling, and a poor decision on standard & 5 August to lower the United States's long-term credit rating from AAA to AA +. S P 500 index & August ended down 5.4%, but experienced severe declines and rebounds along the way.
Mutual funds shares saw a surge of net resource outflows during the second week of August, but then the net outflow slowed to the pace more in line with recent months activity. "Our research over the last two decades shows that the foreclosure spikes after the stock market declines are usually limited in scope and did not last long," says Avi Nachmany, Director of research of the SI. "However, the continuing doubts about the United States economy and European sovereign debt problems reducing investors ' appetite for risk."
Equity mutual funds saw net outflows of 23 billion dollars in August, compared with a net outflow of resources from 24 billion dollars in July. United States equity funds saw a net outflow of 21.4 billion dollars in August, and international/global equity funds saw a net outflow of $ 1.4 billion.
Bond mutual funds saw net outflows of $ 11 billion, compared with a net inflow of 8 billion dollars in July. Taxable bond funds experienced a net outflow of $ 10 billion and Muni Bond funds experienced net outflows of 1 billion dollars. Leading position in net outflows were floating rate and high yield bond funds, both of which are sensitive to fears of a recession. The bright spots were corporate short-term and intermediate maturity of bond funds, which together brought in 6 billion in positive flow as some investors continued to look for alternatives to low-yielding cash.
Bond funds ' net flows seem to turn positive in late August, "said Mr. Nachmany. "Given the expectation of continued instability and the Federal Reserve to keep interest rates extremely low, demand for bond funds should rebound selection."
Money market funds saw a net inflow of 69 billion dollars in August, benefited from a flight to safety. It was a reversal from July, when money was a net outflow of $ 113 billion. In the first eight months of the year 2011 funds suffered a net outflow of total 183 billion dollars.
ETFs: Separately, Strategic Insight said that funds (ETFs), Exchange-Traded US in August, survived a nearly $ 1 billion in net inflows. Leading in net flows were a great mix of ETFs (about $ 5 billion in inflows), leveraged ETFs ($ 3 billion) and bond ETFs ultra-short time $ 2 billion); Diversified markets ETFs saw the biggest net outflows (nearly $ 2 billion).
Through the first eight months of the year 2011 with ETFs (ETNs) saw a net inflow of $ 89 billion, pace that can still produce for the fifth consecutive year, 100 billion dollars or more inflows into ETFs. At the end of August 2011 US ETF assets stood at 1.06 trillion dollars.
Strategic Insight, an asset international company, is a leading research firm for the mutual fund and wealth management, providing customers with in-depth studies, consultation and electronic support systems solutions.